Gold trading outlook: futures retreat as Fed rate hike uncertainty persists

On Tuesday gold for delivery in December traded within the range of $1,168.70-$1,179.10. Futures closed at $1,178.00, rising 0.40% on a daily basis, while marking the first gain in the past three trading days. The daily high has been the highest price level since October 16th, when gold went up as high as $1,184.10. In weekly terms, the precious metal appreciated 2.36% last week, or the most since the week ended on September 20th, when a weekly rate of 3.14% was registered.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were losing 0.14% for the day to trade at $1,175.80 per troy ounce. The yellow metal overcame the range support level (S3), as it went down as low as $1,173.50 earlier today.

In recent months there have been constant speculations among market players over when the Federal Reserve Bank will introduce the first rate hike in almost a decade. There have even been opinions that the Bank will probably delay its decision to hike borrowing costs until sometime next year. The reports on US retail sales and producer prices added to that case, while, at the same time, the data in regard to consumer inflation, consumer sentiment and housing starts urged some market participants not to be that bearish.

Following the array of macroeconomic data, released so far this month, the focus is to shift on the upcoming Federal Open Market Committee policy meeting scheduled on October 27th-28th. Some experts have expressed an opinion that raising the target range for the fed funds rate in October would be too soon, thus, they suggested that such a move may be witnessed at the last meeting on policy for this year – in December.

Maintaining interest rates at the current low levels is usually considered as a bullish factor for gold, as investors tend to have a lesser appetite for risk and vice versa.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for gold are presented as follows:

R1 – $1,178.95
R2 – $1,179.91
R3 (range resistance) – $1,180.86
R4 (range breakout) – $1,183.72

S1 – $1,177.05
S2 – $1,176.09
S3 (range support) – $1,175.14
S4 (range breakout) – $1,172.28

By using the traditional method of calculation, the weekly pivot levels for gold are presented as follows:

Central Pivot Point – $1,175.83
R1 – $1,196.77
R2 – $1,209.93
R3 – $1,230.87

S1 – $1,162.67
S2 – $1,141.73
S3 – $1,128.57